The GSEs increased their credit-risk transfers by 30.4 percent in 2016 from the previous year. This means that Fannie Mae and Freddie Mac both hit their risk-transfer targets by executing different forms of CRTs that covered $548.0 billion of mortgages, according to a recent report from the Federal Housing Finance Agency.“Fannie Mae and Freddie Mac have made credit risk transfer a regular part of their business and they continue to improve and expand the scope of their programs and explore different transaction structures,” said FHFA Director Melvin Watt. The FHFA directed the GSEs to transfer credit risk on 90 percent of their targeted business: long-term, fixed-rate mortgages with loan-to-value ratios exceeding 60 percent.
Fannie Mae CEO Timothy Mayopoulos’ personal relationship with a Fifth Third Bancorp executive has resurfaced thanks to whistleblower complaints, prompting the House Committee on Oversight and Government Reform to ask questions. The relationship between Mayopoulos and Heather Russell, the chief legal officer for Fifth Third Bancorp, caused the bank to terminate its lawyer last summer because of conflict of interest concerns. Both Mayopoulos and Russell are separated from their spouses, and both revealed the relationship to their respective companies. However, the Federal Housing Finance Agency Office of the Inspector General issued a management alert last week about whistleblower complaints, raising...
The Federal Housing Finance Agency Office of Inspector General published several reports on issues related to examiners in late March, including an update on the Housing Finance Examiner Commission Program, which it found to be lagging. The FHFA has acknowledged the need for a commissioned examiner program to provide classroom and on-the-job training to examiners. But, while progress has been made, the IG said more needs to be done to produce commissioned examiners. Of the FHFA examiners that were commissioned, the IG said they were commissioned by other federal or state regulators prior to their work for the FHFA. In 2013, the agency established the...
The Treasury Department reneged on its support of the Federal Housing Finance Agency’s single- director structure last week. The issue stems from a recent PHH Mortgage-initiated lawsuit challenging the Consumer Financial Protection Bureau’s structure as unconstitutional, which led to questioning the similarly structured FHFA. Although the Treasury previously sided with the FHFA, the Trump administration decided to side with the mortgage lender. The Treasury Department is now making a similar argument that the FHFA’s structure is also unconstitutional. The CFPB and FHFA, the GSEs’ regulator, are independent agencies led by a single director whom the president can only fire for cause.
Freddie Mac’s vice president of single-family business transformation is one of five industry innovators honored by the Mortgage Bankers Association with an MBA Insights Tech All-Star Award recognizing industry leaders who have made outstanding contributions in mortgage technology.
Despite rumors to the contrary, Fannie Mae and Freddie Mac forked over most of their fourth-quarter earnings to the Treasury Department at the end of March, as scheduled. But some industry insiders wonder whether the timing of future payments will be altered to reduce the likelihood that either of the government-sponsored enterprises might need another bailout. In early March, there were talks predicting, or hoping for everything from a possible suspension of the Treasury sweep to replacing the quarterly payment with an annual one. Speculation may have been fueled by uncertainty about what the Trump administration wants to do about the now eight-year-old conservatorships of the two GSEs. In 2017, Fannie and Freddie can only retain...
Wells Fargo’s legal woes are continuing after a federal judge in the U.S. District Court for the Southern District of New York last week ordered the company to face several lawsuits by institutional investors alleging MBS fraud. U.S. District Judge Katherine Polk Failla ruled that Wells Fargo must face five lawsuits by a few dozen funds that are holding the bank liable for losses incurred after the MBS they purchased lost value due to the financial crisis. The plaintiffs include...
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